I recently caught up with Costa Mesa-based Rip Curl USA Chief Executive Kelly Gibson at the new Rip Curl store in downtown Huntington Beach.
The 5,500-square-foot shop is on Pacific Coast Highway in The Strand shopping center and is designed to showcase the Rip Curl brand by displaying memorabilia from the company’s history and selling a wide swath of clothes, accessories and equipment.
“There is only one Huntington Beach,” Gibson said. “We needed our footprint here, in the most visible area of the world. Consumers and retailers have a different and better understanding of Rip Curl when they leave this store.”
Rip Curl Inc. is headquartered in Aus-tralia and its annual sales are approaching $330 million. It is one of the top three brands in many global markets, just not in the U.S., Gibson said.
The company made many mistakes here, from a rotating cast of top management to trying to sell clothing lines mostly designed in Australia that were either ahead or behind the trends in the U.S.
Gibson formerly was the president of O’Neill Cloth-ing, part of La Jolla Group Inc. in Irvine. He took the chief executive post at Rip Curl in October 2006.
Under Gibson’s watch, about 70% of the apparel line now is designed in Costa Mesa versus 10% to 15% in the past.
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Rip Curl’s Gibson: “we are in great shape” |
Rip Curl is working hard to repair relationships with retailers and continues to ask for more shelf space. Gibson thinks Rip Curl has a compelling case: It is not oversaturated at the retail level, the brand is marketed globally, the product has im-proved and the team has stabilized.
Gibson said they are getting “baby winds” and are opening a lot of retail accounts but are not yet getting prime positions inside stores.
“While it’s a huge challenge, we think we can get it to where it deserves to be,” he said.
Gibson said the short-term goal for the U.S. division is to run without the investment from global headquarters.
“We are getting close,” he said.
For fall orders, the climate is tough, Gibson said. Rip Curl opened 100 retail accounts in the spring and 100 accounts in the fall. But business with its existing retailers, many of which are struggling with the slowdown in consumer spending, “is very difficult,” Gibson said.
Rip Curl USA, working off a small revenue base, is planning for growth this year but not at the double-digit rate it had previously planned.
Rip Curl USA can weather the storm, Gibson said.
“We are very profitable globally,” he said. “Now, we’ve been hit like everybody else, but we have no debt. We are in great shape.”
Gibson said he encourages his staff to look at the glass as half full: Rip Curl will be standing after the recession shakes out some companies and will be able to offer retailers a brand that is not widely distributed in the U.S. yet has all the marketing and support of a larger company.
When all is said and done, Gibson said, “We could be the new 40-year-old brand.”
Analog Clothing
You’d never know you were in an office park in Irvine once you step inside Analog Clothing’s loft-like space, with its hardwood floors, ample light and photography and art on the walls.
Analog makes boardshorts, denim, T-shirts, snowboarding clothing and other apparel that targets the surf, skate and snowboard crowd. It is part of Burton Snowboards, a Vermont-based snowboarding company.
Some retailers have been attracted to the emerging brand because it isn’t in a ton of stores, Analog General Manager Kevin Meehan said.
“We have no plans to expand distribution,” Meehan said. “We have a lot of great retail partners.”
But that doesn’t mean Analog doesn’t have growth plans. The ultimate goal is to become one of the top three brands in surf, skate and snowboard stores, Meehan said.
“We don’t aspire to be No. 5,” he said.
Analog’s fiscal year ended in February, and Meehan said Analog met its projections. He would not disclose sales growth numbers or actual sales, but would say that Analog is still small.
Currently, Analog is taking orders for its fall and winter clothes. The bookings are going well, and orders from Canadian stores are particularly strong.
“I’m happy where we are landing,” Meehan said.
Still, “it’s not easy” to achieve growth in this economy, he said.
Meehan recently traveled to Japan and Europe to check on Analog’s operations there and said being able to plug into Burton’s global platform “is huge.”
And while there are many advantages for a small brand to have the infrastructure backing of Burton, “in this economy, there are no free rides,” Meehan said. “Every-body’s got to pull their own weight.”
In response to the recession, Analog is spending conservatively to make sure every dollar invested has a return, he said. That means no excess inventory.
“We can’t plan for reorders,” Meehan said. “We are planning tight buys for reasonable growth. We are not buying above that except for key styles or carry-over styles where there is less risk.”
Montgomery is the founder of Shop-Eat-Surf.com, a business news and information Web site for action sports executives.
